Postal Services Bill — Second Reading — 27 Oct 2010 at 18:39

Anna Soubry MP, Broxtowe voted to prepare for and permit Royal Mail privatisation. The vote was also in favour of changing the rules relating to ownership of the Post Office and in favour of passing provisions modifying the regulation of postal services, particularly to protect the UK's universal postal service.

The majority of MPs voted to prepare Royal Mail for privatisation; to change the law to enable the Secretary of State for Business to sell the nation's interest in the company; to change the rules relating to Post Office's shares enabling the establishment of an employee share scheme and possible mutualisation; and to change the regulation of postal services, particularly to protect the UK's universal postal service.

MPs were voting on if the Postal Services Bill[1][2][3] should be read for a second time. ie. if it should continue on its path to becoming law.

Royal Mail is the company which delivers letters, providing a "universal service" to the UK.

The Post Office is the company which runs the network of Post Offices.

The Government are proposing preparing Royal Mail, which is currently owned by the state[4], for a possible sale (privatisation). The Bill contains provisions which would change the rules on Royal Mail share ownership, and nationalise substantial pension liabilities. These proposals are intended to permit and encourage private sector investment in Royal Mail; in the words of Business Secretary Vince Cable to: "provide a framework in which a sale could take place"[5].

The Post Office Limited is a wholly owned subsidiary of Royal Mail Group Ltd, which in turn is a wholly owned subsidiary of Royal Mail Holdings plc.The Government owns 100% of Royal Mail Holdings plc.[6] The Bill contains provisions introducing an employee share scheme within the Post Office and permitting mutual ownership (ownership by staff, customers and other interested parties) in the future.

Details of provisions contained within the Postal Services Bill:

Accrued Royal Mail Pension Plan liabilities (of 10.4 Billion[7]) are to be taken on by the Government.

Restrictions on ownership of Post Office Ltd shares are modified to provide for employee share ownership and a possible move to a mutual ownership structure in future. (Mutual ownership would be ownership by those with an interest in the company eg. staff, customers, and the Government).

An employee share scheme is to be set up within the Post Office

A report to Parliament is to be required should the Government decide to sell off any of its shares in Post Office companies.

Responsibility for regulating the Post Office is to move from Postcomm to OFCOM.

Provision is made for a "special administration regime" to protect the continuation of the universal postal service in the event of the service provider being at risk of entering insolvency proceedings.

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